Cedar Fair zeroes in on cutting $1.6B debt

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Its deal to be acquired by a private equity firm dead, Cedar Fair LP is moving on with its corporate life by trying to reduce its $1.6 billion debt and wondering what plans its largest shareholder may have in store.

Since the $2.4 billion deal with Apollo Global Management was ended by mutual agreement April 6, top executives of the Sandusky-based amusement park chain have been meeting with lenders to negotiate better terms for the company's huge debt load.

Company Chairman and Chief Executive Dick Kinzel, Chief Financial Officer Peter Crage, and corporate Treasurer Roger Allen "have been meeting with banks all last week and this week," said Stacy Frole, Cedar Fair's investor relations director.

"What we're hearing is that the markets are opening up. It's difficult to gauge that until you go to the markets to determine whether that's the case or not, so that's why they're out there."

However, she declined to say whether Cedar Fair executives have met or talked with officials of Texas investment funds Q Funding III and Q4 Funding, which together control 18.1 percent of Cedar Fair's shares.

The funds, known collectively as Q Investments, filed a statement this month with the U.S. Securities and Exchange Commission indicating the funds "now intend to engage in conversations with the [Cedar Fair] and all other interested parties about the future of the [Cedar Fair]."

A spokesman for Q Investments said fund officials will not elaborate on that statement or reveal if it has had had conversations with the northwest Ohio firm.

Asked whether Cedar Fair is considering changing its corporate structure, Ms. Frole said that is not considered a priority.

When the Apollo deal fell apart, Cedar Fair said in an SEC filing that some shareholders might face higher tax liabilities because the limited partnership was no longer paying a quarterly distribution that in the past offset some of the tax obligation.

Instead, she said, the company is focused on increasing attendance and customer spending this year at its 11 amusement parks and six water parks. "I don't think it's any secret that 2010 is going to be a very important year for us," she added.

The company is counting heavily on a pair of new $20 million roller coasters, at its Kings Dominion park in Virginia, and its Carowinds park in Charlotte, N.C., to boost attendance that was down 7 percent overall in 2009 at Cedar Fair parks.

The coasters feature a NASCAR theme and have had big crowds in their initial weeks of operations, said Paul Ruben, an editor at Park World magazine.

"Historically, when a park puts in a major coaster, you see a jump in attendance between 5 and 15 percent," he said.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.